International public procurement

International public procurement

Public procurement accounts for 15-20% of global GDP and GPA commitments alone represent around EUR 1.3 trillion in business opportunities worldwide. The EU advocates open international public procurement markets and has committed itself to granting market access to its public procurement markets for certain goods and services. On the other hand, many EU companies are experiencing difficulties in getting access to non-EU countries’ public procurement markets. Some trading partners have maintained or introduced protectionist or discriminatory measures which hit EU companies. In response, the EU is taking action in several areas to ensure a level playing field and increase market opportunities for EU companies.

Agreement on Public Procurement

The main international agreement related to public procurement is the World Trade Organization’s (WTO) Agreement on Public Procurement (GPA). The EU is represented in GPA negotiations by the European Commission (Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs)

A revised GPA agreement was signed on 30 March 2012 and entered into force on 6 April 2014. The revised GPA provides for further opening up of the public procurement markets of the parties to the agreement. It has two elements: rules and obligations, and schedules of entities of each party whose procurement is subject to the agreement. The revised GPA indicates which market access opportunities must be open to international tendering. It applies to contracts worth more than specified threshold values.

In total, 16 parties are currently part of the agreement (the EU, Armenia, Canada, Hong Kong (China), Iceland, Israel, Japan, South Korea, Liechtenstein, Montenegro, the Netherlands with respect to Aruba, Norway, Singapore, Switzerland, Chinese Taipei, and the United States). Montenegro has recently joined and New Zealand’s accession has been approved by the GPA Committee in October 2014. Other WTO Members, including China, Moldova, and Ukraine, are negotiating accession to the GPA.

International Procurement Instrument

Public procurement represents a substantial part of the EU economy and many countries around the world. However, in contrast to the EU’s policy favouring greater openness, many non-EU countries are reluctant to open their public procurement markets to international competition.

The International Procurement Instrument confirms the principle of openness of public procurement markets. At the same time, it aims to strengthen the position of the EU when negotiating access for EU businesses to the public procurement markets of non-EU countries and to clarify the legal situation for foreign bidders, goods, and services participating in the EU market.

On 29 January 2016, the Commission presented a revised proposal for an International Procurement Instrument.

The proposal amends a previous one from March 2012. In January 2014, the European Parliament had approved the position of the leading Committee on International Trade (INTA) on amendments to the original Commission proposal and had given a mandate to the rapporteur to enter into negotiations with the Council of the European Union. The Commission Work Programme for 2015 announced that the proposal would be amended in line with the priorities of the current Commission to simplify the procedures, to shorten investigations and to reduce the number of actors involved in implementation.